January 16, 2007 People's Daily
Myanmar oil, gas sector absorbs fresh foreign involvement in year-open of 2007
A Chinese oil company signed contracts here Monday with the Myanmar Ministry of Energy on conducting crude oil and natural gas exploration at three deep-sea blocks off Myanmar's western Rakhine coast, signifying a fresh foreign involvement in Myanmar in the sector in the year-open of 2007.
Under the production sharing contracts signed between the China National Petroleum Corporation (CNPC) of China and the Myanmar Oil and Gas Enterprise under the ministry, oil and gas exploration will be carried out at blocks AD-1, AD-6 and AD-8 off the Rakhine coast which cover a total area of 10,000 square-kilometers.
Countrywise speaking, the
contracts are a follow-up of a series of those initiated between a consortium
comprising two Chinese and one Singaporean companies with Myanmar
period from October 2004 up to January 2005 on gas exploration at
onshore Block-M (Kyaukphyu) and A-4 in western Rakhine state,
Block M-10 and M-2 in the Mottama offshore area, onshore Block
C-1 (Indaw- Yenan area) and Block C-2 (Shwebo-Monywa area) in
northwestern Sagaing division.
Those two Chinese companies are the China National Offshore Oil Company (CNOOC) Myanmar Ltd and China Huanqiu Contracting and Engineering Corporation, while the Singaporean company is Golden Aaron Pte. Ltd and the Myanmar side was represented by the state- run Myanma Oil and Gas Enterprise.
Meanwhile, Myanmar is planning to sell gas produced from two biggest blocks A-1 and A-3 in the Rakhine offshore area to neighboring countries such as India, China and Thailand as well as South Korea. However, the final decision to which country the gas will be sold is being postponed up to now.
Natural gas deposits were found at the Block A-1 (Shwe field and the Shwephyu field) and Block A-3 (Mya field) in the Rakhine offshore area in January 2004 and April 2005 respectively, explored by another consortium of oil companies led by South Korea 's Daewoo International Corporation with 60 percent-stake. Other companies go to South Korea Gas Corporation (10 percent), ONGC Videsh Ltd of India (20 percent) and GAIL (10 percent).
The Shwe field holds a gas reserve of 4 trillion to 6 trillion cubic-feet (TCF) or 113.2 to 170 billion cubic-meters (BCM), while the Shwephyu 5 TCF and the Mya 2 TCF with a combined proven reserve of 5.7 to 10 TCF being estimated by experts.
In 2006, Myanmar attracted foreign involvement in oil and gas exploration in the country from as many oil companies as from six countries, namely Thailand, Malaysia, Russia, Australia, India and Singapore.
Thailand's PTTEP took up two more blocks -- M-7 and M-9 in the Mottama offshore areas, while Malaysia's Petronas planned three more blocks, M-16, M-17 and M-18 off Myanmar's southern Tanintharyi coast.
In September 2006, the JSC Zarubezhneft Itera Oil and Gas Company of Russia stepped in for the first time, cooperating with the MOGE and India's Sun Group and initiating a production sharing contract to explore oil and gas at Block M-8 lying off the Mottama offshore area.
Moreover, an Australian company also reached a contract in November of the year with the MOGE to conduct oil and gas exploration and production in the country's Yetagun gas field ( east block) off the southern Tanintharyi coast.
Furthermore, the GAIL of India and the Silver Wave Energy of Singapore signed a production sharing contract with Myanmar in December last year to explore oil and gas at Block A-7 in the Rakhine offshore area.
In the latest development, The PTTEP of Thailand found more natural gas at Zawtika-1 (A) test well in block M-9, which is estimated to hold 2.5 TCF or 70.79 billion BCM and the whole block above 8 TCF.
The Zawtika-1 (A) test well of block M-9 is termed as an international level gas deposit like Yadana and Yedagun projects in the same Mottama offshore area and Shwe deposit in off western Rakhine coast.
Meanwhile, local media reports said Myanmar is deliberating to reopen its onshore oil blocks to foreign companies for exploration and six such blocks in Kachin state's upper Chindwin River region and Hukaung Valley, and the Ayeyawaddy delta region are likely to be granted for foreign engagement.
The authorities in March 2005 announced that it would not grant onshore oil exploration by new foreign oil companies but retained them to be operated by the MOGE.
Myanmar has abundance of natural gas resources in the offshore areas. With three main large offshore oil and gas fields and 19 onshore ones, Myanmar has proven recoverable reserve of 18.012 TCF or 510 billion cubic-meters (BCM) out of 89.722 TCF or 2.54 trillion cubic-meters (TCM)'s estimated reserve of offshore and onshore gas, experts said.
The country is also estimated to have 3.2 billion barrels of recoverable crude oil reserve, official statistics indicate.
The Myanmar figures also show that in the fiscal year 2005-06 which ended in March, the country produced 7.962 million barrels of crude oil and 11.45 BCM of gas. Gas export during the year went to 9.138 BCM, earning over 1 billion U.S. dollars.
Available statistics reveal that such investment in Myanmar's oil and gas sector had reached 2.635 billion dollars as of March, the end of the fiscal year 2005-06, since the country opened to foreign investment in late 1988, dominating the country's foreign investment sectorally.
With continued foreign involvement in 2007 in the oil and gas sector, it is predicted that the sector will help boost the country's gross domestic product in the development of national economy.